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Mortgage rates have been on a decline for a couple of years, and that has increased the benefits of a mortgage refinance for homeowners in Washington.
When mortgage rates fall, this presents a prime opportunity for homeowners to refinance their mortgages and take advantage of much lower rates. In turn, this can save them tens of thousands of dollars or more over the duration of their mortgage.
And based on how low mortgage interest rates are today, now may be a great time to capitalize on low rates and save by refinancing.
When mortgage rates decline, it might make sense to refinance. The financial benefits of refinancing can depend on several factors. The homeowner’s current mortgage rate, the rate assigned to the new loan, and the length of time you plan to say in the home all play a role.
Over recent weeks, refinancing has boomed in Washington and across the nation as mortgage rates have continued to plummet. Rates have hit record lows multiple times over the past year. And as of the third week of January 2021, they still remain extremely low.
Right now, the average mortgage interest rate for a 30-year fixed-rate mortgage is 2.77%, according to Freddie Mac.
In fact, refinancing has been so popular among homeowners as a result of low rates that lenders have been having a tough time keeping up with the demand.
Many people with an existing home loan don’t realize what position they are in, as far as interest rates and refinancing go. Or maybe they don’t think about it at all. But while rates remain low, homeowners may want to consider the opportunity to refinance to save a bundle.
At the same time last year in January 2020, the average rate for a 30-year fixed mortgage loan was 3.60%. That’s based on the weekly industry survey conducted by Freddie Mac. Rates have been declining steadily through the first part of this year, and have actually been on a downward trend since late 2018.
That’s where we are now, as of early January 2021. Looking forward, some economists and analysts have predicted that rates will remain low throughout 2021. But there’s no way of knowing for sure. A lot could change between now and then.
Refinancing usually works best as a long-term strategy. There are typically closing costs involved, just as there are with a purchase loan. So the idea is to save more money over the long term than what you pay in processing / closing fees. The point at which this occurs is known as the break-even point.
If you’re a homeowner in Washington, and you’re currently paying on a mortgage loan, you owe it to yourself to look into the potential for savings. Depending on your situation, you might be one of those homeowners with an interest rate incentive to refinance.
If you are considering refinancing your mortgage, Sammamish Mortgage can help. We are a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region that includes Idaho, Colorado, and Oregon. We have been offering a wide variety of mortgage programs and products with flexible qualification criteria since 1992. Please contact us if you’d like to find out if you could benefit from refinancing your existing mortgage.
Fannie Mae and Freddie Mac have been in the news quite a bit over the past few years, so it’s a good time to do a refresher on who they are and what role they play in the real estate market.
In today’s blog post we’ll share how you can provide paperwork and other evidence to show your mortgage lender that you’re a quality applicant who has the ability to make their payments.